The Usefulness of the Academic Literature for National Culture - Essay Example

Introduction The increasing globalization of the modern world has dramatically restructured business relations. While international trade has been central to business for centuries, with the advent of the Internet, social networking, and production mechanisms, the world has witnessed what can almost be termed a new industrial, as well as digital revolution. With the increasing interconnectedness of business relations in the modern world, the recognition of cultural differences has assumed correspondingly increased importance. While cultural studies spans an expansive array of academic disciplines, within the spectrum of business strategy perhaps most central are considerations related to national culture. As a means of developing broader range insights into the nature of culture, business, innovation, and profit, this research assess the usefulness of the academic literature on national culture for helping a multinational corporation devise its strategy. As there are a number of broad ranging theories on national culture, this research advances by analyzing the relationships and associations between key factors found in the literature. Analysis One of the prominent areas where academic literature on national culture has been implemented in terms of business strategy is in the hospitality industry. Baker & Moreo (2008) investigated power distance management between cultures. This specific investigation administered questionnaires to managers in different international regions, specifically: the United States, Thailand, Malaysia, and Turkey. Specifically, the research notes that the questionnaires sought to determine if, “managers from varied power distance cultures would exhibit varied degrees of participative style, openness to strategic change, formality of strategic control, and people-focused orientation when setting strategic goals” (Baker & Moreo, 2008, p. 12). The results were inconclusive regarding specific differences in power relationships between national cultures. As a result of these findings the authors argue that managers operating in international contexts need not be concerned with the relation between distance and power relationships. Such findings demand further investigation, as there is the possibility of limitations because of the specific organizations that were implemented, as specific trends in the cultures that may be more amenable to each other (Tandukar 2008). Still, there literature makes a significant contribution to broader ranging strategic investigations, as it constitutes a specific perspective on these relations. Such a notion functions to indicate that while individual research studies may lack the large-scale reach that would allow them to make significant impacts on business strategy, collated and implemented in a comprehensive approach could reveal significant insights. Another prominent area where literature on national cultures has been intertwined with business strategy is business ownership. Larimo (1998) tested the notion that national origin significantly impacts the strategies of multinational corporations. The research specifically examined the choices that were made between their entering the United States through partially or wholly owned subsidiaries. The specific organizations that were analyzed included a number of firms operating in the United States with origins in either Japan or Finland. These countries were specifically chosen as they differ significantly in their cultural elements and structural differences from the United States. Larimo (1998) claims that control elements were properly accounted for, and the research still revealed that cultural distance between the investors origin and the target country were significant; still, they argued that cultural differences did not bear significantly on decisions. While the early noted insight that interstices between literatures must be found, there research can be considered in terms of a number of specific findings. Notably, within the context of this investigation the primacy of cultural distance over cultural characteristics seems to attest to the recognition that the overarching economic superstructure holds a prominent determinant on business strategy. Conversely, distance can be given primacy over this superstructure as a determining force. One considers that these tenants of research could constitute hypotheses of further investigations. Another prominent consideration is the nature of strategic investment processes. While the forms of investment a multinational corporation engages represent an expansive array of platforms in itself, and surely cultural elements affect these investment paths differently, this essay argues that broad ranging qualitative understandings can be gained from looking at specific investment paths. Teegen (2001) examined the means by which national culture influenced the regional direction of investment in research and development. The study specifically sought to gain empirical evidence as to the way that 39 United States multinational corporations direct research and development investment. The results of this specific study demonstrated that while culture influenced the direction of research and development investment it was only in a minimal way; rather location was a more primary determinant. These finding is significant as it echoes similar findings, albeit in a different context, in the study conducted by Larimo (1998). Ultimately, it is such research nodes that point towards greater elements of substance in the academic literature on national cultures. While broad ranging connections between elements of culture and strategy, as well as specific connections between forms of investment can reveal qualitative truths, another means by which academic literature on multinational culture could potentially contribute to business strategies is through the way cultures specific business institutions, such as research and development. While Teegen (2010) examined the potentials of cultures impacting the regional direction of investment in research and development, Hicks (2008) investigated the means by which differing foreign countries approach the multinational corporation’s research and development efforts. This study demonstrated that oversees markets primarily predict the entry of United States research and development, while the science and engineering capabilities of the specific country is the main determining factor of the organization’s intensity after the organization enters the country. One considers that other research supports the notion of core values in education that diverge between cultures (Law 2012). These findings are significant as they indicate that seemingly consider literature on national ‘culture’ may be operating under too broad a definition. Namely, while Teegen (2010) considered culture under the banner of country, Hicks (2008) demonstrates that culture in the sense of education and academic success actually plays a more significant role in determining intensity of investment. While these factors are only indicators – that don’t actually indicate business strategy – it is only a step away for a multinational corporation to strategically recognize that a country strong in science and engineering or one improving in these realms would make the most long-term sense for investment in research and development. One of the major texts that specifically links national cultures to multinational corporation business strategy is Tsang (2002)’s Business Strategy and National Culture: Us and Asia Pacific Microcomputer Multinationals in Europe. This text examines national culture as it applies to the strategic management of United States, Japanese, Taiwanese, and Korean multinationals in the microcomputer industry. The research specifically examined backward linkages within these multinational organizations investment practices in market-driven and resource-driven strategic orientations. The research concluded that it was core cultural values rather than a universal countrywide set of values that primarily influenced revenue and asset allocation. To a great extent one sees a direct parallel between these findings and these established above. Still, there is a notable dissonance that reveals significant elements related to the significance of usefulness of academic literature on the subject. In these regards, while the earlier research considered culture in terms of large-scale nations, this text notes that culture must be considered in terms of core values. Additionally, this research extended the debate from concerns regarding research and development to one involving ‘market-driven and resource-driven strategic orientations’. The extension of such strategic elements to include a more expansive array of business elements seems to attest to the efficacy of even large-scale business strategies being driven by cultural values. The consideration of cultural values as being the primary contributing factor to business strategy in the literature is confirmed by studies that examine more directly personal elements of business strategy. Indeed, one of the most prominent areas where national ‘culture’ has been linked to business strategy has been in management interactions (Chevrier 2009; Ulijn, J, Lincke, A, & Karakaya, Y 2001; ‘Harnessing the Power of National Cultures’ 2003; Rosen 2000). Trivellas (2007) extends these considerations to note that employee performance has been linked to cultural elements. To a great extent this literature seems to reflection the notion that on a human scale culture directly impacts best management practices. It seems that to an extent such significations of the concept of ‘culture’ are aligned more closely with the earlier core values definition. Ultimately, academic literature on management supports the notion that core values can directly influence business strategy. Conclusion In conclusion, this essay has examined the usefulness of the academic literature on national culture for helping a multinational corporation devise its strategy. This research has argued that trends in the literature indicate that the academic literature on national culture is useful for devising business strategy. Still, the extent that this literature on national culture is useful seems to largely be contingent on the way that culture is defined and the type of specific type of business strategy. Ultimately, core cultural values have been demonstrated to have the most prominent significance for business strategy. References Baker, A. Moreo, P. (2008) Does national culture affect hotel managers' approach to business strategy? International Journal of Contemporary Hospitality Management Volume: 20, Issue: 1, Publisher: Emerald Group Publishing, Limited, Pages: 7-18 Chevrier, S 2009, 'Is National Culture Still Relevant to Management in a Global Context?', International Journal Of Cross Cultural Management, 9, 2, pp. 169- 183 Tsang, D. (2002) Business Strategy and National Culture: Us and Asia Pacific Microcomputer Multinationals in Europe. Edward Eigar Publishing. Harnessing the Power of National Cultures. 2003, Engineering Management, 13, 1, p. 4 Hicks, D (2008) ‘The maturation of global corporate R&D: Evidence from the activity of U.S. foreign subsidiaries’ Research Policy. Volume: 37, Issue: 3, Pages: 390-406 Larimo, J. (1998) ‘The Impact of Culture on the Strategy of Multinational Enterprises: Does National Origin Affect Ownership Decisions?’Journal of International Business Studies Law, W 2012, 'Educational leadership and culture in China: Dichotomies between Chinese and Anglo-American leadership traditions?', International Journal Of Educational Development, 32, 2, pp. 273-282 Rosen, R 2000, 'Enter The Brave New World', Workforce, 79, 4, p. 76 Tandukar, A 2006, 'Culture clash', Brw, 28, 20, pp. 66-67 Teegen, H J (2001) ‘Global R&D activity of the U.S. MNCS: Does national culture affect investment decisions?’ Multinational Business Review. Volume: 9, Issue: 2, Pages: 1-7 Trivellas, P, 2007, 'A Dynamic Simulation Model of Organizational Culture and Business Strategy Effects on Performance', AIP Conference Proceedings, 963, 2, pp. 1074- 1077 Ulijn, J, Lincke, A, & Karakaya, Y 2001, 'Non-Face-to-Face International Business Negotiation: How is National Culture Reflected in this..', IEEE Transactions On Professional Communication, 44, 2, p. 126 Read More